Ivy Asset Management in conjunction with Columbia Business School released two studies today related to hedge funds. According to the press release:

The first is entitled, "Do Activist Hedge Funds Create Value", and looks a hedge fund shareholder activism. According to the study, based on nearly 800 events in the United States from 2001-2005, hedge fund activists are significantly more successful than other institutions, such as pension funds and mutual funds, in their activist efforts. Two thirds of the time they are successful in achieving their stated goals or gaining significant concessions from their target. The study finds that activist hedge funds generate above benchmark returns of 5% to 7%. Interestingly, hostile activism received a more favorable market response than non hostile activism.

The second study entitled, "Which Shorts are Informed? A Practitioners Guide", found that over 12.9% of the volume on the New York Stock Exchange was generated from short selling both large and small stocks and that this number has been increasing over the last few years. This study shows thatinstitutional short sellers have in fact " ... identified and acted on important value-relevant information that has not yet been impounded into price" and that within 30 days the most heavily shorted stocks did indeed change in relative price by 1.43% (19.6% annualized). In addition, the findings showed that short sellers " ... are important contributors to more efficient stock prices."

I'll add links to the actual studies once they are posted (a quick search on the SSRN found nothing). But these new studies are likely to add to the growing body of literature finding substantial beneficial micro and macro market effects in the rise of hedge funds.